Is LULU a high-quality business?

AlphaMadera's AlphaQuality grade scores Lululemon Athletica Inc. on six pillars — profitability, capital efficiency, balance-sheet strength, growth durability, cash generation, and shareholder yield. The composite letter grade reflects how LULU compares to a Buffett-style quality bar.

What is Lululemon Athletica Inc.'s AlphaQuality grade?

AlphaQuality assigns a letter grade (A through F) to LULU based on a six-pillar quantitative model. The live page shows the composite grade plus each pillar's individual score with the underlying metrics.

What makes LULU a quality stock?

AlphaQuality looks at return on capital, free-cash-flow margins, debt-to-equity, revenue stability, dividend and buyback policy, and operating-margin trend. Stocks scoring well across all six pillars earn higher grades — the methodology favors compounders over cyclicals.

LULU - Lululemon Athletica Inc.

Price: -- -- | CONSENSUS: Hold DETAILS | PRICE TARGET: $200.57 DETAILS

AlphaQuality

Quantitative six-pillar business-quality grade

Platform & Compounding FCF

AlphaQuality — archetype-weighted quantitative grade

A- 86.6 / 100 composite

Composite Grade

Composite of six pillars weighted for platform & compounding fcf businesses. Purely quantitative — no stock price or analyst input.

Profitability

Weight: 25%

A- 86.0

5yr Avg ROIC 21.0% 94/100
Operating Margin Trend +0.45 pp/yr 68/100

Capital Efficiency

Weight: 15%

A+ 96.2

5yr Avg ROE 27.3% 100/100
5yr Share-Count CAGR -2.2% 89/100

Growth Quality

Weight: 25%

A 92.1

5yr Revenue CAGR 15.4% 91/100
5yr EPS CAGR 15.3% 88/100
Revenue-Growth Years (5) 5/5 100/100

Cash Generation

Weight: 20%

B+ 76.3

5yr FCF Margin 12.1% 75/100
5yr FCF/NI Conversion 0.78x 78/100

Balance Sheet

Weight: 10%

A+ 97.8

Net Debt / EBITDA -0.00x 95/100
Interest Coverage (EBIT/Int) 30.00x 100/100
Altman Z-Score 5.84 100/100

Stability

Weight: 5%

C 51.1

EPS Volatility (σ/μ) 0.71 14/100
Piotroski F-Score 6 67/100
Negative-Revenue Years (5) 0/5 100/100

6 of 6 gurus held; 1 new buy; 3 added; 2 trimmed.

Holders: 6 +1
Avg Δ position: +14.4%
New buys: 1
Full exits: 0

Halvorsen new
Dalio increased +97%
Soros decreased -66%

How this is calculated

AlphaQuality grades six pillars from 0-100 and weights each by archetype:

Profitability (25%) — 5yr Avg ROIC, Operating Margin Trend
Capital Efficiency (15%) — 5yr Avg ROE, 5yr Share-Count CAGR
Growth Quality (25%) — 5yr Revenue CAGR, 5yr EPS CAGR, Revenue-Growth Years (5)
Cash Generation (20%) — 5yr FCF Margin, 5yr FCF/NI Conversion
Balance Sheet (10%) — Net Debt / EBITDA, Interest Coverage (EBIT/Int), Altman Z-Score
Stability (5%) — EPS Volatility (σ/μ), Piotroski F-Score, Negative-Revenue Years (5)

We deliberately ignore stock price, analyst targets, and consensus ratings so the grade is suitable for backtesting forward returns. A minimum of 5 fiscal years of audited statements is required; distressed and highly leveraged infrastructure businesses are declared ungradable rather than forced into a numeric score.